Development or Displacement?

ByJulia Van Develder

Nobody denies that downtown Detroit and midtown are happening. Vacant high-rise buildings are turning into luxury condominiums, a massive sports stadium is under construction, a new streetcar line runs along Woodward Avenue connecting downtown and midtown, millennials order lattes at upscale coffee bars, and real estate prices are going through the roof.

But elsewhere in the city, people are having their water shut off for delinquent payments. And not just a few. According to the Detroit News, the city shut off water service to 23,300 homes in 2015, and the shut-offs are ongoing. “Businesses and government-owned properties [including the city’s golf courses] owe nearly twice as much as residences … but only 680 were shut off in 2015,” the newspaper reported.

Elsewhere in the city, another 6,000 homes were put up for auction in September, despite the ACLU’s efforts to block the latest massive foreclosure action. Writing in the Detroit Free Press, Bernadette Atuahene, visiting professor at the University of Chicago Law School, argues, “Detroit’s unprecedented property tax foreclosure rate is indefensible because property tax assessments in Detroit are, in fact, illegal.”

According to the state’s constitution, assessments cannot exceed 50 percent of market value. Using citywide sales and assessment data, Atuahene found that in 2015, the assessments of 64.7 percent of properties sold violated Michigan’s constitution. “In all years studied,” she writes, “the illegality was most pronounced for lower-valued properties. That is, the city is more likely to assess modest homes at illegal levels than it is more expensive homes, leaving the most vulnerable homeowners drowning in injustice.”

Meanwhile, that new Red Wings stadium is being funded 60 percent by taxpayers, and the city sold the land on which it sits for $1 to the Red Wings owner billionaire Mike Ilitch’s development company.

City residents from many walks of life talk about Detroit’s problems and the solutions they’re implementing.

On the East Side of Detroit just off of East Jefferson on Manistique Street, Wayne Curtis and Myrtle Thompson-Curtis live in a modest brick house and run Feedom Freedom Growers, a community garden on the lot next door. Longtime activists and members of the Boggs Center to Nurture Community Leadership, the Curtises were part of a two-year community fight to prevent their across-the-street neighbor, Lela Whitfield, from losing her home. Whitfield had inherited the house from her mother, only to discover that her mother had taken out a reverse mortgage on the house years earlier, and Whitfield now owed Fannie Mae nearly $60,000 on a house appraised at $9,000.

“So we built this wall, the Foreclosure Free Zone, to keep the dumpsters out,” says Curtis. “They were just going to go in and take everything out, all of her belongings, and throw it in the dumpster.”

"It’s a fight for the city. Who’s going to determine what’s going to be done with the resources of the city? How are policies going to be made and in whose favor?”

To make a long and complicated story short, with the help of a pro-bono attorney and publicity generated by the neighborhood protests, Whitfield eventually succeeded in gaining title to the house, free and clear. But the mortgage company undoubtedly paid far more in legal fees for the string of court appearances by its Farmington Hills–based law firm than the house was worth. Why?

According to Kim Sherobbi, another Boggs Center activist, it’s because Manistique Street is only about a mile and a half from Grosse Pointe Farms, a posh enclave on Detroit’s northeastern border. “This area is desirable,” she says. “It’s close to the Detroit River. They want to build housing here. There are lots of people moving in, and lots of people are being displaced. That’s a real issue of tension for us because Detroiters who have been here for a long time are having a very difficult time holding on to their homes.”

“In this area right here, there are around 250 to 300 foreclosures about to happen,” adds Curtis. “It’s a fight for the city. Who’s going to determine what’s going to be done with the resources of the city? How are policies going to be made and in whose favor? We are reawakening from our role as marginal, expendable workers who are optimistic that sometime somewhere along the line someone is going to do something in our favor. That’s not going to happen until we become more vocal and more participatory.”

The question is, can development take place without disruption and displacement? If, for example, you have a poorly maintained multifamily building with 10 units, only five of which are currently habitable, and barely habitable at that, rehabilitating that structure is inevitably going to require relocating those tenants. But if respect for the needs and rights of those tenants is a fundamental tenet of your economic redevelopment plan, then you will have in place policies that ensure that existing residents also benefit from the project.

But in Detroit those policies are either nonexistent or ad hoc at best. According to an exhaustive study of displacement and relocation issues in Detroit by Capital Impact Partners (CIP), the Housing and Revitalization Department “encourages” but does not require that 20 percent of the units in development projects using city-owned property serve low-income households. Some residents think it should be a requirement.

A mission-driven lender committed to funding projects in underserved communities that both address social justice issues and deliver a financial return, CIP promotes resident retention programs that would provide rental subsidies to allow displaced residents to move back into rehabbed buildings, inclusionary zoning that would mandate affordable housing, development fees to fund infrastructure investment or school funding, and community benefits agreements to ensure that the community has a seat at the table when development projects are being negotiated.

“One thing we have learned from this study,” concludes CIP, “is that a variety of stakeholders’ values intersect around residents’ need and right to the choice of clean, safe, affordable housing in their neighborhood. At minimum, it is within our collective capacity to facilitate development that fully considers displacement risks and responsibly addresses any instance of relocation. Though it won’t happen without intervention into market forces, Detroit can be a city that encourages growth while providing access and affordability for all— particularly in the city’s highest-opportunity neighborhoods.”